Mr HORNE (10:29 AM)
—It is interesting to come in here and listen to absolute hypocrisy from the government benches. The government loves to come in here, as the Minister for Agriculture, Fisheries and Forestry did yesterday in response to a dorothy dixer, and tell the House and Australia how well rural industries are doing. But he did not mention the `D' word—he did not mention the dairy industry. If we want to note the effect of dairy deregulation on the dairy industry, we only have to look at the ABARE prediction that was put out yesterday. The headline said `Milk prices should increase'. That is a very positive headline, but when I read into it I could not help but notice that it also warned:

... industry deregulation has cut sharply into the number of farmers producing milk, with total milk production rising marginally after years of strong increases.

It goes on to say:

Dairy exports are tipped to fall almost one per cent to $3.2 billion, after climbing $1 billion between 1998-1999 and the current financial year.

Skim milk powder production is expected to fall ...

It also says:

Total market milk production, which was hit hardest by dairy industry deregulation last July, has actually fallen in the past 11 months.

That is the effect of dairy deregulation on an industry that has been the mainstay of the economy of many areas on the North Coast of New South Wales. Dungog and Gloucester are towns in the electorate I represent. Dungog is the most adversely affected community in the whole of Australia and Gloucester the third most. It has been calculated that the dairy industry was worth $16 million a year to the community of Dungog before deregulation.

If we want to measure the compassion, the understanding, of this government for communities like that, let me tell the House that last December I took the mayor of Dungog and the mayor of Gloucester and their general managers to meet the minister and explain how adversely dairy deregulation was going to affect those communities. I think he understood. What did those communities get? Dungog has received $84,000 to do a study that will be printed in 12 months time, and they will immediately have to do another one because the dynamics will have changed so much it will no longer be relevant. And the week before last they got $110,000 for a family organisation to construct a concrete batching plant. I have got nothing against concrete—we need it in our buildings—but the whole point is that that is the total money that community has got for an industry that was worth $16 million a year. And this government has the audacity to come in here and tell us it represents rural and regional Australia. It does not even understand the needs in those communities. The minister has never been there, despite meeting with the mayor and the general manager.

I want to talk about some other anomalies. This is a government that prides itself on being a low taxing government. The Treasurer tells us every question time it is the lowest taxing government in Australia's history. We just heard the member for Eden-Monaro say that this is a federal government program—$1.7 billion worth. If that is not hypocritical, because he knows—

Mr HORNE
—as well as the member for Page knows, this is fully funded by consumers, and will be for the next nine years, with 11c on every litre of milk that is consumed in Australia. Talk to the dairy farmers—obviously members opposite do not—and they will tell you that they pay that 11c a litre many times over because of the drop in farm gate price. This government continues to identify it as a federal program. It is not; it never has been. And what does this latest attempt to try and put your finger in the hole in the dyke before it collapses achieve? It extends it for another year: more consumers money, not one cent out of the federal government's pockets. It is all right for the Treasurer to come in here and talk about surpluses, but this whole program continues to be funded by the consumers.

There are other issues I would like to raise. We have heard repeatedly from the government: what did the states do about it?

Mr HORNE
—We have heard that this was a state responsibility, that the states should have compensated for quota. The member for Page in particular, as a former minister in the Greiner government, knows only too well that quota was never issued by a state government. No licence fee was ever paid for quota. If he cares to have a look at the New South Wales Dairy Corporation handbook, Individual quota policy 1998-99, he would see that it says:

A quota is a quantity of milk that has been determined by the Corporation.

It goes on and says:

Briefly stated, the Corporation does not see a quota allocated under the Act as a negotiable or a transferable asset with a value as property.

Yet members come in here repeatedly stating that it was the responsibility of the states to compensate for that. Why? The handbook of the industry said it was not an asset, it was not saleable and should not be regarded as property.

We should ask the question: does this compensate all? The answer is no. I would like to read a letter I received yesterday from the daughter of a dairy farmer. It says

My two sisters and I inherited a dairy farm in Gloucester after our father's death in 1997. The farm had a quota attached which was valued for probate purposes at $122,060. At that time the farm was leased to—

a family, and I will not name them—

who paid a monthly rental tied to the price of quota or market milk.

In the lead up to deregulation all correspondence and any rights to vote were given to the tenant as the registered supplier of the milk. As the farm and the quota owners we received no correspondence and were not allowed to vote, even though we were in attendance at the meeting to do so.

After deregulation the tenants have walked off the property, taking their substantial Dairy Adjustment Package payment to commence operations somewhere else. This has left our property in a much less viable state as a dairy farm.

Attached is a copy of our appeal to the Dairy Adjustment Authority which we subsequently lost.

We now hear that the Federal Government is providing $140m in additional assistance. We urgently request that you ensure that any entitlement under this additional scheme be paid in full to the original farm and quota owners or the lessors rather than any of it being paid to the lessees. In our case these lessees have walked off the farm in April with their substantial package, and have left our property run down from over stocking and with rental payments in arrears. These tenants have no further interest in the property yet they will continue to be compensated for loss of eamings from the property for the next eight years under the original adjustment package. It appears quite ludicrous that they could possibly be considered for any further payments.

We vehemently request that the Federal Government consider very carefully how they allocate the further assistance, particularly with respect to lessors/lessees.

It raises this point: how thoroughly did the minister and his department look into the justice of their original package? Here we have a family that had to pay probate on the value of a quota and yet, when it came time for compensation only a short while later—

Mr HORNE
—this minister and his department said, `You have no interest in it. The tax office says you pay the probate on it, but you are not entitled to have an interest in it and get any compensation from this very fair package that we are putting forward.' It is a disgrace, and the member for Page knows it is because he has spoken with many dairy farmers in his electorate.

The other point I would like to make is that this package in no way addresses modern farming practices or farmers who knew that deregulation was on its way and were prepared to go out there and invest. I appreciate the nod of agreement by the member for Page, because those are the people that are missing out. These are the people that are capable of producing high volumes of milk at low cost. They are the people that really entered into deregulation before it occurred. They ran their farms without more than 35 per cent of quota milk and, because of that, because they had a low volume of quota, they miss out entirely. They are very aggrieved by it because this is really a bit of a payout to the people who said, `We got nothing for our quota. We believe we should have.' So they are going to get a maximum of $60,000 and an average of about $30,000. This government is really not encouraging modern practice at all and it is not rewarding the people that should be rewarded, and for that reason I certainly support the amendment.

The debate over the deregulation of the dairy industry will go on for many years because it is going to see the destruction of communities that have relied on dairying for well over a century, and I represent a number of those communities. What this government should have been doing for at least 12 months before dairy deregulation was workshopping those communities, advising them of the devastation that deregulation was going to bring them and that they should have been looking for alternative industries or processing.

I agree with ABARE and their statistics that show that Australia has the potential to be one of the greatest exporters of dairy products in the world. But what do we find? I attended a morning tea with some senior citizens the other day, and they said to me, `Why has the price of butter escalated suddenly?' I said, `I don't know. I don't eat butter. I eat the alternative product, but I will find out.' I found out that butter production has dropped because there is a shortage of milk. The old butter factories that we used to have all the way up the North Coast of New South Wales are no longer there; New South Wales is importing its butter. The dried milk factory that used to be in Gloucester and had 36 jobs closed earlier this year; we are now importing dried milk from New Zealand. These are the sorts of things that deregulation of the dairy industry has brought about. These are the sorts of things that are destroying the country towns that the National Party of Australia will tell you are their lifeblood—and they wonder why dairy farmers are angry! I know why they are angry, the member for Page knows why they are angry, and this legislation in no way gives them the answers that they are looking for. I support the amendment.